How to Manually Input Amazon Seller FBA Data to QuickBooks Online

If you find any of this tough, confusing or uncomfortable, you might want to use taxomate which allows you to automatically send your financial data to QBO. Manually inputting your Amazon Seller information is not always easy and can take you away from the more important aspects of running your business. Below you will learn how to easily use QuickBooks Amazon together.

Manually Input FBA Data to QuickBooks

Amazon Pay Day

I input my Amazon data at the conclusion of the Amazon payment cycle. I start the process by going to Payments > Statement View. This report shows the amount of dollars Amazon deposited into my account.

For example, in the sample period between January 7 to January 21, my Amazon account generated $583.57 in sales. After the company took off their fees, my total deposit came out to $405.19. This is the amount that Amazon transmitted to my checking account.

Amazon Pay Day

Please note: I'm using this time range because it features a reimbursement. I want to show an example that involves reimbursements because these are all too common.

My QuickBooks setup automatically synchronizes with my business checking account. I have the Amazon payout categorized as FBA Sales Income.

Working with Your Transaction Report

The big problem is when you load up the summary view report, you don't get a breakdown of the fees that are taken off your total sales.

Some people don't have a problem with this. They like collating or aggregating all their fees into a single category. Many people would label this "Amazon Fees." These individuals like catchall categories.

Other people, myself included, would like a breakdown of every single fee that goes into the Amazon FBA system. Why? Well, I want to know each individual fee that went into order handling and picking and packing fees. The reason why I'm curious about this is that I want to make better decisions regarding products.

Generally speaking, though, I kind of prefer a middle of the road approach. Accordingly, at the minimum, I track the following information:

• Inbound Shipping Fees
• Inventory Placement Fees
• Storage Fees
• Monthly Professional Seller Fees
• Return Fees
• Amazon FBA fees

Read also: Amazon Referral Fees and Amazon FBA Fees

Amazon Transaction Report

Amazon FBA, of course, covers handling, picking out a product and packing it, referral fees, and weight handling of each sale.

Every time I get hit by a new fee, I have to decide if I want to track it separately or just add it to a greater Amazon FBA aggregate fee.

By using the transaction view report, I get to calculate these different fees. For example, if you are curious about your inbound shipping fees, you can get this information by filtering "service fees" and then manually summing up the figures listed under "inbound transportation charges."

Amazon QuickBooks Spreadsheet

Although I'm able to get these identical numbers using an Excel spreadsheet, I prefer summing up these fees using Seller Central.

In addition, when I use the transaction view report, I also locate the amount of the sales tax I have collected. I then print out the statement view report to see if there is any number in the "other" column. Generally, this is zero.

I would click on the "total" column, and I will see a sales tax amount. I write this amount on the hard printout which I will then add up using Excel in the following step.

I verify the deposit and sales amounts to match them with the figures reported by the statement view report at Amazon Seller Central to make sure that I am doing the numbers correctly.

I line up the sum of the professional fee, storage fee, inventory placement and inbound shipping with the sum reported when I click on Selling Fees > FBA listed on my statement view report. In this example, the total fees are $47.23.

My $22.89 reimbursement appears on my statement view report, located in the tab Other Transactions>Other.

Amazon QuickBooks Manual Input

Once I've gotten all this information, it's time to take the next step: entering Amazon data into QuickBooks. This part is the most straightforward part. You only need to access the Amazon liability register to input your data.

Import Amazon data into QuickBooks

This can with just a single entry. You can also choose to itemize and break down the entry between the fees that you owe and the sum Amazon owes you, like reimbursements, taxes, and sales amount.

I then input the amount for reimbursements, taxes, and sales.

After completion, whatever number shows up in red indicates the amount of money Amazon would have deposited to my checking account. I have to reverse this because if not, QuickBooks is going to indicate an excess of FBA sales for that same amount.

Process Your Profit and Loss Statement

Once you have entered this information into your QuickBooks Online account, all the numbers you need to generate a profit and loss statement will be available to you. Just make sure that your QuickBooks data figures match whatever figures you have on your spreadsheet.

QuickBooks Profit and Loss Statement

Please note: your sales tax is not going to be in your profit and loss statement. How come? It's neither an expense nor an income.

You have to account for this by using the payable account dedicated to sales tax. This indicates how much sales tax your Amazon seller account paid out after collection.

It's also important to note that my COGS figure will not appear because you must enter COGS manually at the last day of the month.

How to Deal with Split Months

In our example, Amazon's pay period ran from January 7 to January 21. This is a convenient example because the pay period all took place in the same month.

What if the pay period is divided into two separate months? The best way to deal with this is to use the accrual method. You use the same process above, but you cut up your entries between months.

In the case of a payment period taking place between January 21 to February 4, you would have to divide the fees and sales the following way:

• January 21 to January 31
• February 1 to February 4

When accounting for these figures, I log the numbers for January using the date January 31. For the February data, I use the date February 4.

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How do I find my Amazon FBA Sales Tax Nexus?

The main reason that people will comfortably buy things from Amazon – and thus the people selling on there – is because they know that Amazon Prime allows them to receive their packages in two days, if not less. Everything great must have some kind of catch to it though - for Amazon sellers the catch is Sales Tax Nexus.

Amazon can deliver products nationwide so quickly because they have them sent out to distribution centers before they are even ordered.

You must be registered as a Pro Seller to get Amazon sales tax, which is important because their reports are far more comprehensive for a Professional Seller than they are a regular one.

Amazon FBA Sales Tax

What is Sales Tax Nexus?

The word “Nexus” comes from the Latin word meaning to “tie” or “bind.” A sales tax nexus could be considered something that ties your business to the state.

U.S retailers are required to collect the sales from buyers where they hold a “sales tax nexus.” The following activities may establish a sales tax nexus:

• Location; This includes any physical place of business such as an office, store, or warehouse
• Personnel; The personnel at your business are individuals who are employees, salespeople, contractors, installers, and anyone else who works for your business in some capacity.
• Inventory; Many states will consider holding inventory in-state to create a nexus even if you don’t have any other personnel or places of business there
• Sales (the Economic Nexus); For about half of states with a sales tax, sellers who generate revenue or transactions over a set threshold will be required to collect sales tax. The threshold for revenue is around $100,000 and the transaction threshold is around 200, but it can vary state by state.
• Affiliates; An affiliate is someone who advertises your products and services for a piece of the profits and having one can create a nexus.
• Drop-Shipping; There are some situations where having a third-party shipping service that delivers products for you creates a nexus
• Selling products at an event i.e. a tradeshow; Some states consider you to have nexus even when selling only temporarily, such as at an event.

What is the Economic Nexus?

An “economic nexus” is when sellers are required to collect sales tax because they reach a threshold of either money from sales or number of transactions. These thresholds are typically $100,000 in sales or 200 transactions in a year.

Economic Nexus is The Newest Kind of Nexus

The economic nexus is the newest kind of nexus for the United States. Around half of the states with a sales tax have their own economic nexus laws. More states have announced they will introduce laws or regulations about economic nexus too.

The economic nexus only came into effect in June of 2018, following a Supreme Court ruling in the case of South Dakota vs Wayfair, which is why it’s a relatively new issue.

How to Determine you Have a Sales Tax Nexus in a US State

Here are the questions you can ask yourself to determine if you’ve got nexus with a state;

• Do you have a physical presence in the state, such as a location or warehouse?
• Do you have anyone working for you in the state such as a contractor, employee, installer, or sales person?
• Do your sales or transactions in a state exceed the economic nexus threshold of that state? If you don’t know, then check with TaxJar’s Sales and Transactions Checker
• Do you have a relationship with a drop-shipper in the state?
• Do you have an affiliate program and any affiliates in the state?
• Do you cross state lines to sell products at events like craft fairs and trade shows?

If you answered yes to any of those questions, then here’s how you can explore if you have nexus or not;

You have nexus. Now what?

Amazon Sales Tax Nexus

Amazon makes it easier to determine sales tax nexus thanks to their Amazon Fulfilment reports. These reports will tell you where Amazon stores your inventory. Here’s how to access the Amazon seller sales tax report:

1. Open Seller Central
2. Open Reports
3. Open Fulfilment

The Inventory Event Detail section shows you where Amazon stores you inventory

There’s a lot of information on the Amazon Inventory Event Detail report, but it’s better to download the report for yourself then try to read it all on the screen.

Choose the download tab and then pick a time-frame that you want. If you’re interested in determining the states where you have sales tax nexus, choose the date when you first started selling products on Amazon.

You can do this using the exact date option on the report. Choose the dates you want and then wait a few minutes for the report to be generated. It can take longer if there is more data to collect.

You can download the report when it finishes generating. The report will be available as a .txt file and you can open it as is or import it into Excel. Select All and copy and paste it into the spreadsheet. The “fulfilment-center-id” column is where you can see information on all the Fulfilment Centers where Amazon stores your inventory. This is where you have nexus and where you would need to collect sales tax.

Read also: The Ultimate Sales Tax Guide for Amazon FBA Sellers

Sales Tax Nexus and Inventory Event Report

After opening the Inventory Event detail, you’ll be greeted with something like this;

The column that is most interesting to us right now is the fulfilment-center-ID. In the worksheet, click the top row of the column and choose the filter symbol, either on the Quick Access Toolbar or with the ribbon, and this puts a down-arrow in the top row of the worksheet.

Click on the down-arrow and you’ll find a list of all the fulfilment centers where your inventory has been stored. Warning - this may be quite a lot of information!

Fulfilment Centers where Amazon stores your inventory

Determining Your Sales Tax Nexus

You’ve now got a complete list of all the fulfilment centers where Amazon has stored your products.

If there are any centers that you don’t expect to see then uncheck “Select All” and click the boxes for the centers that seem questionable. This brings up a list of all the products stored in those centers. This is just for your information though. You need to know all the fulfilment centers where your inventory is located.

You might be wondering what fulfilment centers the letters and numbers represent. The center names are determined by airport closest to the fulfilment center. DFW would mean Dallas Fort Worth Airport, which is – of course – in Texas. CHA is the Chattanooga, TN airport, meaning Amazon stores your inventory in Tennessee.

Amazon Fulfilment Centers

The numbers after the airport designation indicate how many fulfilment centers are near the airport. This website has a list of all airports by code and state, and here is where you can find a list of all the many Amazon Fulfiment Centers.

💰💰Top Amazon Seller Tax Deductions in 2020

Nobody likes taxes. Well, nobody except the government. The only thing worse than having to do taxes is having to read about them, yet here we are. Tax season is coming up after all, a time when people start asking about tax deductions.

Tax Deduction Tips

One thing your taxes pay for is the US Census Bureau, and the data nerds there report around 90% of all employed Americans are working for someone else. They receive a W2 form from their employer and punch the numbers into a program like TurboTax .

Read also: How to Connect TurboTax with Amazon FBA Marketplace

Things are a little rougher for the other 10% that manage their businesses. The good news is that there are lots of ways to trim tax bills. It’s not too late for you to apply some tax deduction tips and keep a little more of that money you worked hard for when the taxman comes calling.

Tax Deduction Tips Amazon business owners

Here are the top 4 tax deductions for Amazon business owners:

• Home Office Tax Deduction
• Health Insurance
• Retirement Plan
• Corporate Structure

1. Home Office Tax Deduction

For your home office to legitimately qualify as a business expense, you only have to prove that you use it exclusively for business purposes. The kitchen table, for example, won’t fall into that category.

Let’s say that you have a spare room in your home/apartment that you use purely as an office. You can legally claim $5 in taxes per square foot of your home office up to 300 sq. ft.

Let’s say you live in a 1,500 square foot apartment and have a 150 square foot home office; you’d be able to write off a 10% tax deduction of your monthly rent as a business expense!

Utilities

If you can deduct your home office from your taxes, you should also be able to deduct some of your utilities. This includes your bills for heating, electricity, and the internet. That means that you can write off around 10% of the total cost for your heat, electricity, and internet.

Home Office Equipment

Don’t forget all of the equipment in your office such as your chair, desk, lamps, paper, etc. As long as you use those supplies for your business, and you can prove this, they are fully deductible from your taxes. 

Did you buy a new computer this year for your business? Well, that’s another deductible right there! Don’t forget to factor personal use of your computer though, such as using it to access personal social media and mess around on the internet. The IRS won’t let you do deduct the entire computer, but if 75% of the time you spend on the computer is for business, then you’ll be able to expense 75% of the cost of your new computer.

Learn more about all of this through the IRS website at:

• https://www.irs.gov/publications/p535/index.html
• https://www.irs.gov/uac/Form-8829,-Expenses-for-Business-Use-of-Your-Home
• https://www.irs.gov/publications/p946/

2. Deduct Your Health Insurance

The self-employed, including sole proprietors, are in charge of getting their health insurance. In other words you can deduct the cost of that health insurance, as well as the health insurance for their family, from their tax bill.

Deduct Your Health Insurance

Keep in mind the rules are different if you are married to someone that receives employee health insurance from their job. The IRS the tax deduction on health insurance if they are members of an employer-subsidized family insurance plan.

Learn more about deducting health insurance here:

• https://www.irs.gov/publications/p535/index.html

3. Consider Your Retirement Plan

Many people who choose to start selling on Amazon do so with a complete focus on the present. They want to make sure they have enough money coming in each month to keep the business going. That’s an understandable viewpoint of course, but one of the best ways to reduce your taxes is to put money aside in a tax-deferred retirement plan.

Consider Your Retirement Plan

We encourage all Amazon sellers to put together their own such tax-deferred retirement plan, even if you only make the minimum contributions necessary to maintain it. This is a great way to boost your tax deductions

Learn more here:

• https://www.irs.gov/Retirement-Plans/Retirement-Plans-for-Self-Employed-People

4. Consider the Structure of your Business

If you’ve filed taxes as a sole proprietor before, you understand that you need to pay self-employment taxes. One way to get around this is to form an LLC and reduce self-employment taxes with an “S Corp Election.” An S Corporation allows you to pay yourself a “reasonable salary,” with the remaining profits taken as being a profit distribution. These aren’t subject to self-employment taxes.

Consider the Structure of your Business

Let’s say your business brings in $130,000 in a year. Ordinarily, you’d have to pay tax on the whole amount. But as an S Corp, you can pay yourself a salary of $70,000 – which was subject to self-employment tax – and then have a profit distribution of $60,000, which isn’t subject to the self-employment tax.

Seek Help If Needed

You’ve probably got lots of questions about taxes after reading through this post. If you do, then we recommend consulting tax professionals. Self-employed people should aim to avoid bending the rules too far, but everyone should still take advantage of the deductions that they are rightfully owed.

Large corporations have entire teams of tax advisors working to pay as little tax as possible each year. As one of those 10% of people working for themselves, you might have to do some of the hard work yourself but running your own business is proof that you can do it.

You wouldn’t have chosen the life you did if you were afraid of hard work after all.

How To Use The Amazon Seller App?

Millions of different products are bought and sold on Amazon on a daily basis and listed through the Amazon Seller App.

The online retail behemoth has provided more opportunities for sellers and buyers to get the best deals and services at both ends of the spectrum.

It has given rise to a new kind of online entrepreneur and provides the support and tools for success.

Amazon gives sellers a huge platform and a global reach with millions of people around the world.

One tool to help sellers with Amazon bookkeeping is taxomate. taxomate allows sellers to import their settlements into either QuickBooks or Xero

Another great tool for sellers is the Amazon Seller App.

How to use the Amazon Seller App?

In order to start selling on Amazon, you need to set up an Amazon seller account. You can go to sellercentral.amazon.com to register. The process of setting up an account takes a few minutes. Once you have registered as an Amazon FBA seller, you should download the Amazon Seller App. This app is completely free to download from the Apple store or Google Play store for Android.

Amazon Seller App is available on Apple Store and Google Play

The app allows you to turn the camera on your phone into a scanner that you can use on any product's barcode to get a price/ fee information from Amazon. With the Amazon seller barcode scanner, you can go out to find the best products to sell on Amazon. The app will give you valuable information such as selling price, fees and other details on products sold on the Amazon site.

Find product Ideas using the Amazon Seller App

People sell all kinds of things on Amazon from unused household products to books, clothes and gifts that were received but never opened. The other way of doing things is to buy items on sale from retailers.

The trick is to find items that are selling for less elsewhere than they are on Amazon. Buying items for a low price and selling them on Amazon at a higher price is also known as retail arbitrage.

You can go to your local Walmart, Home Depot or any other big box store to find items that are on sale. Clearance sales are the best way to get products.

Use Amazon Seller App To Find New Product Ideas

Once you are in the store, open the app and use the amazon seller app scanner feature to scan a barcode. You will then get a screen on your phone that shows two things: selling eligibility section and sales rank.

The app will let you know whether you are eligible to sell a specific item and learn how fast the item is selling on Amazon via sales rank. The general rule of thumb when it comes to sales ranking is to look for products with a ranking lower than 150,000.

On the financials section of the app, you will be able to see the return on investment on a particular scanned product.

The app will give you a net profit number which you can compare to your minimum profit threshold. You can set your minimum profit cap, but make sure you chose an amount that will allow you to withstand small price drops without wiping your entire profit out.

What else can you do with the Amazon Seller app?

• View and analyze past sales. You can actually see sales trends for products on the app
• Manage orders
• View and confirm shipments
• Manage your returns
• Issue refunds
• See how much and when Amazon will pay you
• Respond to messages
• Manage your inventory
• Find new products to sell
• Access pricing details
• Check current prices
• View sales rank
• View competing offers, estimated profitability, and read customer reviews.

All in all, the Amazon Seller App exists to make your life as an Amazon FBA seller that easier. It lets you run your business conveniently on your phone.

💸💸 Amazon Seller Fees Breakdown to become a Six-Figure Seller

Whether you are just starting or scaling your Amazon product line, you should have a clear understanding of the relevant Amazon Seller Fees. This information is crucial for making important business decisions.

Fees depend on the kind of product you plan to sell on Amazon (similar to eBay). In addition to product-based fees, you also should take a look at variable costs. This can get quite tricky. For example, if you are focusing just on fixed costs, your variable costs might eat into your profit margin.

Costs of Selling on Amazon

There are three main groups of Amazon Seller Fees that you need to be aware of when it comes to selling on Amazon:

1. Amazon Referral Fees: Depends on sales category
2. Seller Account-Related Fees: Individual Seller, Amazon Pro Merchant Accounts
3. FBA Fees or Shipping Costs: Amazon FBA Fees, Monthly Storage Fees, Label Service, Long Term Storage Fees

What follows is a compilation of all the information you'll need regarding these three clusters of Amazon Seller Fees.

1. Amazon Referral Fees

For every sale, Amazon will charge you with a referral fee. These Amazon seller fees depend on the per-unit price of the product you sold and that item's category.

It doesn't really matter whether you are a Pro or an Individual seller, you will have to pay an amazon referral fee for every sale.

There are two factors that determine the Amazon referral fee:

1. Category of the product you sold
2. Price of the unit sold

Generally, sellers usually pay an amazon referral fee close to 15% of the price of the products sold. 

Minimum referral fees only apply to certain product categories and range from $0 to $2.

Amazon Referral Fees by Category

Chart Detailing all Amazon Seller Referral Fees (Effective 2/19/2019)

2. Second Category of Amazon Fees: Amazon Seller Fees Account-Related

Amazon Seller Fees can also be different depending on whether you register for a Pro or Individual account.

Here's the breakdown of these two types of accounts and their fees:

a. Individual Seller

The Amazon Individual Seller account is for beginner sellers or sellers who only make a few sales per month.

With an Individual Seller account, you won't have to pay a monthly Amazon Seller fee. In the event you make a sale, you pay $0.99 for every sale you make.

Main Drawback of Individual Seller

The main drawback of Amazon Individual Seller accounts is its limitations:

• Only can move a maximum of 40 items per month
• Cannot upload your product listings in bulk
• Only can sell certain products in a limited range of categories
• No gift-wrapped customer purchases.
• Do not have access to Amazon's inventory management features
• Must pay $0.99 Amazon Seller Fees on top of every sale

b. Amazon Pro Merchant Accounts

If you think that you're going to be moving more than 40 units every month, you definitely need to look at signing up for the Amazon Pro seller program. This account charges $39.99 per month but packs a lot more features.

Here are just some of the benefits you get with this type of seller account:

• You can sell as many units as you want
• No limit to the number of products you can list
• You can upload your product listings in bulk
• Your account is integrated with major e-commerce and order management platforms
• You can use this account with the Amazon FBA program
• Your customers get access to gift-wrapping

Please note: Even with an Amazon Pro Merchant account you still are responsible for paying Amazon Referral Fees (as noted above).

3. Third Category of Amazon Fees: Shipping Costs and Credits

If you don't plan to use the Amazon FBA program and are thinking of shipping the orders you fulfill yourself, Amazon can assist you by giving you shipping credits. Keep in mind that while these credits do help, they may not always cover your entire shipping cost. In fact, for a lot of sellers who are unaware, these credits easily become an additional expense.

The key factors impacting your shipping fees and the amount of shipping credit Amazon will give you are the type, weight, and size of the products you plan to sell. 

For smaller, more compact and lighter items, the shipping credit might actually be more than what you actually pay in shipping. However, if you are selling heavy or bulky products, you end up spending more on shipping for every unit you sell.

Given the shipping costs involved in direct sales and merchant fulfillment, more and more sellers on Amazon have switched over to Amazon's Fulfillment by Amazon (FBA) program to take care of their shipping needs.

Amazon FBA (Fulfillment by Amazon) Fees

What exactly do you get with the FBA system? First of all, you get peace of mind because you're no longer doing direct product fulfillment. Amazon takes care of that headache for you. Second, you may also get a sales boost because of Amazon primer buyers. But before you get too excited, take a look at the FBA fee breakdown below.

The FBA Amazon Seller Fees are actually made up of four different fees compiled into one:

1. Pick
2. Package
3. Process
4. Ship

This fee covers the management of your products at Amazon's FBA fulfillment centers. It takes care of everything, starting with packing all the way to shipping.

Monthly Storage Fees for Your Inventory

For the FBA system to work, you have to ship your inventory to your designated Amazon fulfillment center.

Amazon charges you for storing any inventory prior to the sale. You are getting charged by Amazon for any space your inventory takes in the company's warehouses.

How are FBA fees determined?

The two key factors are the weight and the size of the products you are storing at Amazon's warehouses.

Amazon uses two separate size categories for FBA products. It categorizes all the products going into its warehouses into two broad categories.

1. Standard Sized Units are products that weigh below 20 pounds. Their packaged dimensions do not exceed 18"x14"x8".
2. Oversized Products: This is a catchall category for all other products that exceed the dimensions and weight of standard sized products. Look at the FBA table from Amazon below to get a clear and realistic impression of your potential costs.

Every month your product sits in Amazon's warehouses unsold, you will be charged the Amazon Seller Fees. It's also important to remember that these fees are charged on top of any account and referral fees you have to pay.

FBA Label Service

If you don't put the right barcode on your products, Amazon can do it for you. However, the company will charge you $0.20 per item processed. With a lot of inventory, this can add up quickly!

Long-Term Storage Fees

If your items stay at Amazon's fulfillment center for longer than 180 days or 6 months, you will also be charged an added fee, which is calculated on a cubic-foot basis. However, the good news is, you won't be charged per item, but based on warehouse space.

Remember . . .

It is best to review the Amazon Seller Fees you are getting charged on a regular basis. You may start to see some areas where you can reduce costs or decrease your long term storage.